Kirksville administrators warn Board of possibly large cuts to state aid

Wednesday

Jun 26, 2013 at 8:32 PMJun 28, 2013 at 11:49 AM

$2.3 million funding cut could come if Legislature acts to override governor's veto of HB 253, measure on state tax cuts

Kirksville school administrators warned of a grim financial future if the Missouri Legislature proceeds with a possible veto override of a state tax cut bill, citing reports that the district’s funding could take a $2.3 million hit starting as soon as July.

The news was contrasted with the district’s regular budget revision which showed the Kirksville R-III’s financials appear to be on solid footing and provide a buffer for any possibly drastic cuts that could come.

“I don’t want to pull the fire alarm quite yet, but this is something that could severely impact us,” Superintendent Patrick Williams told the school board at its Wednesday meeting.

Williams said the district has received correspondence from a group called the Coalition for Missouri’s Future warning of the possible unforeseen implications of such drastic tax cuts in particular on education across the state and in Kirksville related to House Bill 235.

The Coalition is a 501(c)4 non-profit social welfare group that has the backing of education-related groups like the Missouri School Boards Association, The Missouri Association of School Administrators and the Missouri State Teachers Association.

The district is estimating that if the measure, which includes various income and corporate tax cuts, is implemented over Gov. Jay Nixon’s veto, it could mean a cut of about $2.3 million from the district’s state funding.

“This is something we need to pay close attention to because it could have an immediate and dramatic effect on public education,” Williams said.

He said area lawmakers had assured him that the measure would not mean drastic cuts to education and that the district should focus on education.

Nixon called the measure a “fiscally irresponsible experiment” and that it would create a $800 million hole in the state budget and cast doubt on the safeguards included within the bill that would prevent cuts from taking place if revenues did not grow by at least $200 million.

The income tax cut was among the Republican-led Legislature’s top priorities, according to the Associated Press, and was designed as a response to a similar but more sweeping tax proposal last year in Kansas.

Under the proposal, there would be a phased-in 50 percent deduction over five years for business income reported on individual income tax returns while the state’s corporate income tax rate would be trimmed nearly in half while the top tax rate for individuals would be reduced from 6 percent to 5.5 percent over the next decade, according to the AP.

Despite the fact the legislature at the earliest would not be able to mount a veto effort until September, the Department of Education would likely begin withholding about a third of its state-aid to help ease the cuts if they’re implemented later in the year, rather than provide full funding for three months and shift the burden to the other nine, explained Assistant Superintendent Jane Schaper.

“We will need to work on a contingency plan in case this happens,” she said.

The grim outlook was delivered to the Board only moments after Schaper reported a strong fund balance and hopeful budget figures to close out the year, with the district receiving about $25,539,500 in revenue for 2012-13 and expending about $27,622,082 on the year.

The difference was attributed to increased contributions on the part of the district to its insurance fund and additional planned purchases in technology as part of an intentional effort to spend down the district’s unrestricted, or available, fund balance.

The district is expected to close out the fiscal year, which ends Friday, with an unrestricted fund balance of about 33 percent, with about $8.9 million on hand.

Schaper said school districts will generally strive for an unrestricted fund balance of at least 15 percent and has accomplished that while increasing teacher and support staff salaries, its own contributions to the health insurance fund and begun the process of implementing its expansive, and expensive, technology plan.

It will be those reserves that the district will need to dip into, Schaper said, if and when the withholdings take place months ahead of any action by the Legislature.

“We’re OK as far as reserves are concerned,” she said. “It would be different if we were at 12 or 13 percent, we would be more concerned.”

E-mails to Walker, Rep. Craig Redmon and Sen. Brian Munzlinger were not returned as of press time.

Meeting glance

Other items of note from Wednesday’s Kirksville R-III School Board meeting:

- The School Board unanimously approved the purchase of replacement cabinets and countertops from low-bidder PSR Construction for $24,545 at Ray Miller Elementary; the installation of multiple large glass windows also at Ray Miller for $10,999 from Aladdin Glass; and the low-bid of $36,550 from Schneider Construction for parking lot improvements across the district.